The present invention relates to methods for depositing and processing taxes. More particularly, it pertains to systems and methods for automatically recording employment, corporate profit and excise tax deposits. The invention includes methods for automatic recording of tax deposit information on a storage medium for use in making bank deposits and withdrawals, as well as automatic recording of tax deposit information on a storage medium and tax deposit coupons to be given to a government agency.
The Department of the Treasury through the Internal Revenue Service and most state governments require taxpayers to periodically deposit withheld employment, corporate profit, and excise taxes in an authorized financial institution or a Federal Reserve Bank branch. Each government contracts with banks to collect the withheld employment, corporate profit and excise taxes. The contract allows a bank to collect tax deposits and tax coupons from depositors. The bank, upon receipt of a tax coupon, must deposit the tax deposit into a Treasury Tax and Loan Account, a TT&L account. The next day, by law, the bank must transfer the money in the TT&L account to the government agency. Thus, the bank earns a one day float on all deposits made with the bank plus a thirty cent charge per deposit.
The traditional method of depositing such taxes with a bank requires a depositor to calculate the due date for the tax deposit according to a government schedule. No later than the day the tax is due, the depositor must manually fill out a tax deposit coupon and write a check for the amount of the tax deposit. The depositor then physically travels to the bank, waits in line for an available bank teller and deposits the tax check and tax deposit coupon with the bank as he does any other manual deposit. The depositor may also mail the tax check and tax deposit coupon to the bank.
The bank teller, or other bank personnel, must stamp the tax deposit coupon in a specified location, indicating the date the tax deposit was made. The government assesses financial penalties against a bank for any procedural or substantive error made by a teller in stamping the tax coupon; thus, banks often hire personnel whose sole duties are to verify that tax deposit coupons have been stamped correctly.
By law, a bank must also prepare voluminous reports and forms within a specified time period after a tax deposit is received. Any error in these reports and forms will also result in the assessment of significant financial penalties against the bank.
After receiving the deposit papers from the depositor, the bank withdraws the tax deposit from the depositor's account and deposits the money into the Treasury Tax & Loan Account. By law, the bank's receipt of a tax deposit coupon triggers the bank's duty to transfer the tax deposit to the government. If the depositor makes a tax deposit several days early, the bank is still required to transfer the money it receives from the taxpayer to the government agency by the next day. By 12:00 the next day, after receipt of a tax coupon, the bank must prepare an "advice of credit" and electronically transfer the money to the government agency. Thus, the bank earns a one day float on each tax deposit.
Under the traditional system, the bank's transaction costs are approximately four dollars per transaction. This includes the personnel time involved in accepting tax deposits, in checking tax coupons to verify they have been properly stamped, and in filling out reports. Increased lobby traffic and financial penalties also add to the bank's costs. The bank's transaction costs are greater than the money the bank earns from the one day float and the thirty cents per deposit paid to the bank. Thus, the bank usually loses money under the current system and the bank is burdened with a labor intensive system which is expensive to operate. Additionally, it is almost impossible to eliminate all bank related errors, thus the bank's transaction costs include the penalties assessed by the government agency.
The present invention addresses the shortcomings of the present-day traditional bank deposit method by providing an improved system and method wherein a depositor may eliminate almost all manual steps necessary in making a tax deposit thereby increasing convenience to the taxpayer. The present invention also allows a depositor to enter future payroll dates. At the depositor's option, the present invention prompts the depositor to make the deposit shortly before it is due. The present invention also tracks the depositor's depositing patterns. When the depositor makes a deposit, the present invention calculates the number of days between the current date and the tax deposit due date. If a depositor consistently deposits a tax deposit less than two banking days before it is due, and then makes a tax deposit two or more banking days before it is due, the present invention alerts the depositor to the pattern variation. The depositor may then validate the tax deposit or re-enter the payroll date and amount.
The system also drastically reduces the labor intensive work performed by bank personnel in accepting tax deposits and generating reports. Further, the system minimizes the chance of bank errors while significantly increasing the "float" time the bank earns on a deposit.
Hence, the present invention decreases lobby traffic in the bank and personnel time involved in accepting and processing tax deposits. The automatic processing of tax deposits, as well as the automatic generation of reports and tax coupons, substantially decreases the number of bank personnel involved in the process of accepting tax deposits. Thus, as fewer individuals are involved in the tax deposit process, the danger of human error, and financial penalties resulting therefrom, is lessened.